SpaceX still has deep roots in the rocket business, but the Elon Musk-owned company is doubling down on artificial intelligence as it prepares for an IPO.
In a social media post Monday afternoon, SpaceX announced it had started a working relationship with AI coding startup Cursor, which includes an option to buy the company for $60 billion. (Should SpaceX decide against buying Cursor, it will pay $10 billion for its work.)
“The combination of Cursor’s leading product and distribution to expert software engineers with SpaceX’s million H100 equivalent Colossus training supercomputer will allow us to build the world’s most useful models,” the company said in the post.
The announcement comes just over two months after SpaceX acquired Musk’s xAI, which runs the Grok chatbot. It also comes as the rocket company prepares for what is expected to be a record-setting IPO later this year, potentially bringing in billions of dollars.
Cursor is a standalone startup that offers AI that writes code and debugs software, much like Anthropic’s Claude Code and OpenAI’s Codex. The product is called Composer.
The tool, which has been publicly praised by Nvidia CEO Jensen Huang, learns a developer’s coding style, then autocompletes, reviews, and, when necessary, edits code. Users can switch between different AI models at present, which has increased Cursor’s costs. Composer has achieved cult status among many tech companies, though critics say Composer can be slow, especially when used with larger codebases. (It also suffered a PR black eye when its customer support AI hallucinated, triggering a wave of cancellations.)
While many investors expect AI companies to play a major role in future development, the systems are currently major financial drains. xAI, for instance, reported a net loss of $1.46 billion in the quarter ending Sept. 30, 2025, and lost $1 billion the quarter before that.
More than 60% of SpaceX’s 2025 revenue came from the Starlink satellite internet service, according to reports based on the company’s confidential IPO paperwork. Still, the company is reinventing itself with a heavy focus on AI as that IPO looms.
Cursor was founded in 2023 by four MIT graduates, all still in their 20s. It raised $2.3 billion in funding last November from investors including Nvidia and Google, giving it a valuation of $29.3 billion at the time. The SpaceX offer is more than twice that amount.
The founders had previously resisted takeover offers from major AI companies. Michael Truell, co-founder and chief executive officer of Cursor, told The Wall Street Journal last year that “all of the AI labs are important partners to us.”
An acquisition by SpaceX would likely change Cursor’s relationship with AI giants such as OpenAI and Anthropic, which are xAI competitors (and the history between Musk and OpenAI is a tense one, to put it mildly, with a fierce court battle between the two beginning soon).
“Excited to partner with the SpaceX team to scale up Composer,” Truell wrote on X after the deal was announced. “A meaningful step on our path to build the best place to code with AI.”
Musk has been focusing more attention on the AI sector recently. In addition to merging SpaceX and xAI, he unveiled plans last month for the Terafab chip manufacturing factory in Austin, Texas, which will produce chips for SpaceX and xAI. While xAI and other artificial intelligence companies have largely depended on TSMC, Samsung, and Micron for the chips that power their systems, Musk said existing semiconductor manufacturers were not producing chips fast enough for his needs.
Intel said earlier this month it had joined forces with Musk to help with manufacturing at the facility, though details about the arrangement were not announced.